News Whipsaw - Watch Your Back!

George Brooks |

TuesdayAugust  12 , 2014      9:13 a.m.  BEFORE the OPEN

    Stock prices shot up last Friday on what was perceived as an improved outlook in Ukraine and Iraq, but the follow through Monday was unimpressive, most likely because the Street didn’t expect the good news to last.

    Investors who jumped in late Friday and  at the open Monday are now having second thoughts. The reason: they may get whipsawed by a  return of bad news.


    In spite of weakness in the market for most of last week, 17 of the 30 Dow industrials traced out respectable reversal patterns capable of supporting  a nice technical rally.

    But there was no follow through in 14 of them, in fact all of the 14 failed to hold their modest gains for the day.  While these patterns can be classified as a one-day-reversal, their action was not dramatic, just unimpressive.

    It looks like they are “testing” last week’s support, something that shouldn’t have happened so soon.

    The market needs a show of commitment by the Bulls, or it is going lower, and it isn’t going to be pretty. Odds favor they will show up – just watch your back.

   Support today is DJIA: 16,495; S&P 500: 1,926; Nasdaq Comp.: 4,376

   Resistance today is: 16,616; S&P 500: 1,940; Nasdaq Comp.:4,413

Investor’s first readDaily edge before the open

DJIA: 16,569

S&P 500: 1,936

Nasdaq  Comp.:4,401 

Russell 2000:    1,141



Depends on who you ask. A.Gary Shilling, publisher of  “INSIGHT” * challenged government press releases in an August 4, Special Report, “After the Government Report Releases.”

    Among the first to warn readers in advance of the Great Recession, Shilling  was quick to point out that the July 30, Q2 GDP report of an annualized gain of 4.0% was misleading with 1.66 percentage points attributed to a change in inventories, bringing the  growth number down to 2.3%, a rate he feels is not great enough to “spawn meaningful growth in wages and labor income.”  Excess inventories that are not worked off by sales  penalize future production.

    He attributes last week’s plunge in the stock market to the Street’s concern that the economy is not rebounding.

    If he is right, the question arises, Will the Fed have to revise its taper schedule ?

THE FED:                               

    We will hear more cautionary  comments from the Fed going forward in an attempt to ease an interest rate hike when its reality hits early next year. The Fed does not want speculative fever to run rampant prior to the rate increase.

     The Fed’s “easing in” policy is bad news for those who want the feeding frenzy to continue unabated, but good news for investors who opt for  a more stable market and an inevitable crunch instead of crash.





    At key junctures, I technically analyze each of the 30 Dow industrials seeking a reasonable near-term support and a more extreme support leyel, as well as a short-term resistance level. By technically studying the balances of buying and selling in each stock, then converting that data back to the DJIA using the “divisor” (0.1557159) I can get a better reading on the average itself.  The DJIA is a price-weighted average and subject to distortion by higher priced issues.

     After yesterday’s crunch, Iran my analysis based on the July 31 closeand concluded the near-term upside for the DJIA HAS DROPPED TO  16,765, a  reasonable downside from here is 16,391 and more extended downside risk to 16,264.

    Note: My daily support/resistance  levels are more short-term oriented



     Not too much happening this week with economic reports.

      For detailed analysis of both the U.S. and Foreign economies along with charts, go Also included is an explanation of each indicator. If you want to know when the next Employment report or any other key report will be released that info is also there under “event release date.”


NFIB Small Business Optimism Ix. (7:30): Index improved to 95.7 in June from 95.0 in May

ICSC Goldman Store Sales (7:45): Dropped 1.4 pct.  in Aug 9 week: Year/year +3.2 pct. vs. +4.1 pct week prior.

JOLTS – Job Openings Labor Turnover (10:00):


MBA Purchase Apps (7:00):

Retail Sales (8:30):

Business Inventories (10:00):


Jobless Claims (8:30):

Impost Export Prices (8:30):


PPI-FD (8:30):

Empire State Mfg Ix. (8:30):

Industrial Prod. (9:15):

Consumer Sentiment (9:55):



July 29   DJIA   16,982  Quite Before the Storm ?

July 30   DJIA   16,912  Market on the Verge of Big Move ?

July 31   DJIA   16,880  Huge Test for Bulls

Aug.  1    DJIA  16,563  False Alarm, or ………

Aug.  4   DJIA   16,493  Trader’s Buy, but Risks are High.

Aug.  5   DJIA   16,569  Bulls “Must”  Step In Now, or…….

Aug.  6   DJIA   16,429  Is The Economy Really Rebounding ?

Aug.  7   DJIA   16,443  Rally to Give Investors a Good Read on Near-Term

Aug.  8   DJIA   16, 368 News Whipsaw = Increased Volatility

Aug. 11  DJIA   16, 553 Rebound to Good News – How Far ?


A Game-On Analysis,  LLC publication

George  Brooks

“Investor’s first read – a daily edge before the open”

Investor’s first read, is a Game-On Analysis,LLC publication for which George Brooks is sole owner, manager and writer.  Neither Game-On Analysis, LLC, nor George  Brooks  is  registered as an investment advisor.  Ideas expressed herein are the opinions of the writer, are for informational purposes, and are not to serve as the sole basis for any investment decision. References to specific securities should not be construed  as particularized or as investment advice as recommendations that you or any investors purchase or sell these securities on their own account. Readers are expected to assume full responsibility for conducting their own research pursuant to investment decisions in keeping with their tolerance for risk.














DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:


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